Topoisomerase 1 (Top1) controls DNA topology, relieves DNA supercoiling during replication and transcription, and is critical for mitotic progression to the G1 phase. Tyrosyl-DNA phosphodiesterase 1 (TDP1) mediates the removal of trapped Top1-DNA covalent complexes (Top1cc). Here, we identify CDK1-dependent phosphorylation of TDP1 at residue S61 during mitosis. A TDP1 variant defective for S61 phosphorylation (TDP1-S61A) is trapped on the mitotic chromosomes, triggering DNA damage and mitotic defects. Moreover, we show that Top1cc repair in mitosis occurs via a MUS81-dependent DNA repair mechanism. Replication stress induced by camptothecin or aphidicolin leads to TDP1-S61A enrichment at common fragile sites, which over-stimulates MUS81-dependent chromatid breaks, anaphase bridges, and micronuclei, ultimately culminating in the formation of 53BP1 nuclear bodies during G1 phase. Our findings provide new insights into the cell cycle-dependent regulation of TDP1 dynamics for the repair of trapped Top1-DNA covalent complexes during mitosis that prevents genomic instability following replication stress.